Suppose in 2007 you were handed a piece of paper and a pencil, and were asked, "Come up with a list of bullet points for how to generate severe stagflation in the years 2010 through 2019."
Wouldn't your list look pretty similar to what has already happened?
"Such aggregates have little meaning, as all human action consists of striving for individual goals."
The Austrian explanation of the boom-bust cycle makes more sense than any other explanation I've seen.
Hayek criticized Keynes for his neglect of the real structure of production, arguing that Keynes's predilection for concentrating on the immediate and purely monetary phenomena accompanying changes in money expenditure, together with his penchant for aggregative macro concepts (total profits, total investment), had led him into contradictory or untenable conclusions.
Government controlled fiat money is and will always be, by construction, fraudulent money.
One of our top priorities must be to get rid of a monetary system that contributes to artificial money creation and credit expansion and thus to recurring boom-bust episodes in production and employment.
Since the heart of credit is real savings, it is obvious that no government schemes, such as cleansing banks' balance sheets, can increase fully backed credit.
Robert Murphy demonstrates in this excellent book a penetrating ability to explain the essence of fallacious economic doctrines. As he notes, three theories offer competing explanations of the Great Depression
In the same way, the path to economic recovery is to allow markets to channel specialized resources to their highest-valued uses, not to dump taxpayer funds on whatever firms and industries happen to be ready for them — or politically connected.
